China Assures Shultz of Openness Policy : Foreign Minister Says Political Upheaval Won’t Lead to Isolation

BEIJING — Chinese Foreign Minister Wu Xueqian assured Secretary of State George P. Shultz on Sunday that China’s latest round of political turmoil will not produce a new era of isolation.

“Our present policy of reinvigorating the domestic economy and opening to the outside world has proved effective . . . and enjoyed immense popular support,” Wu said in a speech at a banquet given in Shultz’s honor a few hours after he arrived in the Chinese capital.

U.S. China watchers had expected the Beijing leadership to set a theme of openness and stability for the Shultz visit in an effort to convince the American government and business community that China’s political changes will not affect the climate for trade and investment. The United States is China’s second-largest trading partner after Japan.

Chance for Assessment

In public, Shultz and his senior aides are ready to accept the Chinese assurances at face value. But privately, some officials say that a coalition of old-line Marxists seems to be taking control of the Chinese government, displacing economic and political reformers. This is a development that probably will inhibit the pace of economic reform and could ultimately affect Chinese foreign policy.

One purpose of Shultz’s week-long visit to China, his first since he accompanied President Reagan on a visit here in 1984, is to give him a chance to assess the political situation following the ouster last month of Hu Yaobang, an unabashed economic and political reformer, from the post of general secretary of the Communist Party.

Shultz is scheduled to confer Tuesday with Deng Xiaoping, China’s top leader, who has made only two brief public appearances since the dismissal of Hu, his longtime protege.

The meeting will give Shultz an opportunity to assess just how firmly Deng remains in control.

First-Cabin Treatment

Shultz arrived in Beijing late Sunday afternoon after stopping off in the southern city of Guilin for a three-hour cruise on the Li River, which winds through jutting limestone cliffs made famous by centuries of Chinese watercolor paintings.

The day was sunny and unseasonably warm but the river, after months of dry weather, was too low to handle even the shallow-draft cruise boats. So Chinese officials dumped 350,000 cubic meters of water from a nearby storage reservoir, raising the river level by five feet.

It was the sort of first-cabin treatment that Beijing authorities apparently have planned for Shultz’s visit, the first by a major international figure since the fall of Hu.

The list of officials Shultz is scheduled to meet reads like the one prepared for a visiting head of state. In addition to Deng and Wu, Shultz will see Li Xiannian, the largely ceremonial president; Zhao Ziyang, the premier and acting party general secretary, and Defense Minister Zhang Aiping.

Shultz also is scheduled to meet Li Peng, a vice premier and possible candidate for premier should Zhao give up that post to keep the more powerful party general secretary position.

Li is a Moscow-trained engineer who knew Soviet leader Mikhail S. Gorbachev when both were students in the 1950s. Some Americans consider Li a leader of the orthodox Marxists who prefers central planning to market economics and might promote Sino-Soviet rapprochement.

From the U.S. side, the reason for including Li on the Shultz schedule seems to be to show that Washington does not bear him ill will. From the Chinese side, it apparently is to demonstrate that Li, for all his reputation for orthodoxy, also is capable of dealing with the West.

Shultz told reporters earlier in the trip that he planned to press Chinese leaders on human rights abuses and on the recent expulsion of two journalists. The U.S. government is known to be concerned about the extent of the current campaign against “bourgeois liberalism,” Beijing’s code phrase for Western-style democratic tendencies.

Nevertheless, in his own banquet speech Sunday night, Shultz stressed openness and economic stability, in effect echoing the theme of his Chinese hosts.

“History has shown that commercial ties can pave the way for expanding relations, for developing shared interests and for stimulating creative energies of our peoples,” Shultz said. “Our political values differ profoundly. But greater openness has resulted in broader mutual understanding and respect. It is important that we remain open to each other as we seek to further strengthen our relationship.”

Shultz left Washington shortly before the issuance of the Tower Commission report on the Iran- contras affair. He has declined to comment on its findings, including criticism of him and Defense Secretary Caspar W. Weinberger for distancing themselves from the policy instead of acting to forcefully reverse it.

A senior State Department official said that Shultz would wait until after President Reagan addresses the issue Tuesday night before saying anything himself.